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This morning, Bernstein analyst Todd Juenger upgraded CBS (CBS) to Outperform and said he views the probability of a CBS-Viacom (VIAB) re-merger as close to zero for many years to come. His peer at Citi voiced a similar opinion and dropped his likelihood of a merger to 25% from 50%. This comes a day after CBS announced that it has filed a lawsuit alleging breaches of fiduciary duty by National Amusements, the parent of both companies which is pushing for a merger of the two. SUIT AGAINST NATIONAL AMUSEMENTS: Yesterday, CBS and the Special Committee of its Board of Directors announced that they filed a lawsuit in Delaware Court of Chancery alleging breaches of fiduciary duty by National Amusements, and seeking to prevent it from interfering with a special meeting of the Board of Directors, at which meeting the directors will consider declaring a dividend of shares of Class A common stock to all of the company's Class A and Class B stockholders, as is permitted under CBS's charter. The dividend, if issued, would dilute National Amusements' voting interest from approximately 79% to 17%. The dividend would not dilute the economic interests of any CBS stockholder. The Special Committee has taken this step because it believes it is in the best interests of all CBS stockholders, is necessary to protect stockholders' interests and would unlock significant stockholder value. If consummated, the dividend would enable the company to operate as an independent, non-controlled company and more fully evaluate strategic alternatives. BERNSTEIN SAYS BUY CBS: In a research note to investors, Bernstein's Juenger upgraded CBS to Outperform from Market Perform and raised his price target on the shares to $65 from $56, based on his view that the probability of a CBS-Viacom re-merger is close to zero, for many years to come. The analyst argued that there is further potential upside to CBS if they succeed in diluting National Amusements' voting stake, which would take away the control discount in the stock and/or add an M&A premium to the stock, as the potential would be opened for more strategic options, including the sale of the company. While Juenger remains very concerned about the health of TV networks, generally, and has plenty of specific concerns about CBS, he believes as a standalone entity it has the cleanest story in all of media. Meanwhile, Citi analyst Jason Bazinet dropped his likelihood of a CBS-Viacom merger to 25% from 50% after CBS filed a Delaware lawsuit asking for a restraining order to prevent Shari Redstone from interfering with a special CBS board meeting. The analyst raised his price target on CBS shares to $66 from $61, and lowered his price target on Viacom's stock to $29 from $30. WHAT'S NOTABLE: After CBS disclosed the interest of another would-be acquirer in court documents, Deadline reported, citing multiple sources, that Verizon (VZ) had been involved in high-level discussions and expressed interest in acquiring the media company before merger talks heated up with Viacom. However, during an interview with CNBC's David Faber, Verizon CEO Lower McAdam said that while Verizon has "looked at" legacy media assets but its focus is on digital. "We looked at legacy over the years and we made a decision to go digital and that's why we bought AOL and we bought Yahoo [...] We had the opportunity to go the linear model, either by purchasing satellite companies or purchasing content companies but that's not our strategy. Our strategy is to get digital content out there over the fastest pipe we can and at the lowest cost possible," McAdam said. PRICE ACTION: At midday, shares of CBS have gained about 1% to $54.15, while Viacom's class B stock has dropped about 1.5% to $28.30.

As previously reported, Bernstein upgraded CBS (CBS) to Outperform from Market Perform, with a $65 price target, as it views the probability of a CBS-Viacom (VIAB) re-merger as close to zero, for many years to come. While the firm remains very concerned about the health of TV networks, generally, and has plenty of specific concerns about CBS, it believes that as a stand-alone entity it has the cleanest story in all of media. Bernstein reiterates an Underperform rating on Viacom.

05/15/18

SBSH

05/15/18NO CHANGETarget $66SBSHBuy

Citi drops likelihood of CBS-Viacom merger to 25% from 50%

Citi analyst Jason Bazinet dropped his likelihood of a CBS (CBS), Viacom (VIAB) merger to 25% from 50% after CBS filed a Delaware lawsuit asking for a restraining order to prevent Shari Redstone from interfering with a special CBS board meeting. The analyst now sees a lower chance of CBS acquiring Viacom. As such, he increased his price target for CBS shares to $66 from $61 and lowered his price target for Viacom shares to $29 from $30.

05/15/18

05/15/18UPGRADE

On The Fly: Top five analyst upgrades

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Gap (GPS) upgraded to Outperform from Market Perform at Telsey Advisory. 2. CBS (CBS) upgraded to Outperform from Market Perform at Bernstein with the firm saying it views the probability of a CBS-Viacom (VIAB) re-merger as close to zero, for many years to come. 3. Ulta Beauty (ULTA) upgraded to Outperform from Perform at Oppenheimer with analyst Rupesh Parikh saying he still sees the potential for more gains and outperformance from current levels. 4. Valeant (VRX) upgraded to Buy from Neutral at Mizuho with analyst Irina Koffler saying adjusting individual product growth estimates has made her more constructive on Valeant's turnaround story. 5. Scotts Miracle-Gro (SMG) upgraded to Buy from Hold at SunTrust with analyst William Chappell saying he believes the bottom in the stock price has been reached, leading to its usual "counter seasonal trend of outperformance" given that the stock has outperformed the S&P500 from June to January in the past 11 of 15 years. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

CBS.A

$54.64

0.64 (1.19%)

02/28/18

02/28/18UPGRADE

On The Fly: Top five analyst upgrades

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Viacom (VIA, VIAB) upgraded to Neutral from Underperform at Macquarie by analyst Tim Nollen, who told investors that the company has taken a decisive turn in strategy to re-set its distribution relationships and is in the early stages of a turnaround. Nollen believes Viacom can return to growth despite any merger outcome with CBS (CBS) and raised estimates on increased U.S. ad and affiliate revenue growth. 2. Tenet (THC) upgraded to Outperform from Market Perform at Raymond James by analyst John Ransom to reflect management's efforts to reduce costs and sell assets. Ransom said the company is reducing debt and could generate $400M in annual free cash flow until its NOL runs out. 3. AB InBev (BUD) upgraded to Positive from Neutral at Susquehanna by analyst Pablo Zuanic, who said the recent weakness provided an attractive entry point as the company had a great January to September period of organic growth, he sees deal synergies with SAB, and he believes Q4 was just as good if not better than the same period a year ago. 4. Etsy (ETSY) upgraded to Buy at Roth Capital by analyst Darren Aftahi after a "strong" Q4 and citing growth reacceleration and margin expansion. 5. Verizon (VZ) upgraded to Buy from Neutral at MoffettNathanson. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

VIABViacom

$28.32

-0.41 (-1.43%)

04/03/18

KEYB

04/03/18NO CHANGEKEYBSector Weight

KeyBanc would likely view Viacom acquisition by CBS favorably

KeyBanc analyst Andy Hargreaves notes that news reports suggest an all-stock offer for Viacom (VIAB) by CBS (CBS) is imminent. The analyst believes this would create earnings growth potential through cost synergies in excess of what CBS standalone is capable of and could increase the likelihood of monetizing Viacom-owned assets through disposition. Hargreaves views the near-term risk/reward on CBS as positive and would likely view a deal favorably. He reiterates a Sector Weight rating on CBS shares.

04/30/18

BARD

04/30/18NO CHANGETarget $33BARDNeutral

Twitter's new partnerships highlight 'growing relevance,' says Baird

Disney's (DIS) and Viacom's (VIAB) announced live content/streaming partnerships with Twitter (TWTR) highlight Twitter's "growing relevance as a distribution platform," Baird analyst Colin Sebastian tells investors in a research note. He believes the partnerships should provide tailwinds for Twitter's video advertising business. Video accounts for greater than 50% of Twitter ad revenue and is its fastest growing ad format, Sebastian points out. The analyst says Disney and Viacom represent two of the company's biggest partnership wins to-date. He keeps a Neutral rating on Twitter with a $30 price target. The stock closed the trading day up 4.5% to $30.31.

Stifel analyst Kyle Evans contends that CBS (CBS) posted the kind of quarter that should fundamentally separate the company from many media peers. However, he said there is no more clarity following its report on whether its Class A shareholders will push for a combination with Viacom (VIAB) that "undermines Class B holders." Evans lowered his price target on CBS to $58 from $64 and maintains an Equal Weight rating on the stock.

VIAViacom

$33.95

-0.7 (-2.02%)

03/28/18

SBSH

03/28/18UPGRADETarget $30SBSHNeutral

Viacom upgraded to Neutral from Sell at Citi

Citi analyst Jason Bazinet upgraded Viacom (VIAB) to Neutral and raised his price target for the shares to $30 from $26. The analyst assigns a 50% probability of a merger with CBS (CBS) and believes Viacom shares would be worth $30 under such a scenario.

VZVerizon

$48.10

-0.39 (-0.80%)

05/11/18

JPMS

05/11/18UPGRADETarget $58JPMSOverweight

Verizon upgraded to Overweight from Neutral at JPMorgan

JPMorgan analyst Philip Cusick upgraded Verizon Communications to Overweight with a $58 price target. The shares at current levels offer a 5% yield and a "free option" on 5G, Cusick tells investors in a research note.

After T-Mobile (TMUS) and Sprint (S) announced a merger agreement, Morgan Stanley analyst Simon Flannery said that while the $43B in estimated synergies is "impressive," the key question is how likely is it that the companies can gain regulatory approval. On competition, he thinks the deal may contribute to a more benign competitive environment in the near-term and that AT&T (T) and Verizon (VZ) could benefit from market consolidation, though he adds that the new T-Mobile would be a formidable competitor in new areas such as 5G and fixed broadband. Flannery added that the deal will be an overhang on tower and fiber providers, noting that part of their $4B in annual network synergies involves a reduction in tower counts from 110,000 to 85,000 over time. However, the analyst said he would expect much more gear to be deployed on each tower and small cells will still expand to 50,000 from 10,000. Tower operators include American Tower (AMT), Crown Castle (CCI) and SBA Communications (SBAC), which are all lower in pre-market trading.

05/11/18

05/11/18UPGRADE

On The Fly: Top five analyst upgrades

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Verizon (VZ) upgraded to Overweight from Neutral at JPMorgan with analyst Philip Cusick saying after a meeting with CEO Lowell McAdam, he has a better understanding that Verizon's "organic approach to wireless has the company on an increasingly stable footing." 2. Mosaic (MOS) upgraded to Outperform from Sector Perform at RBC Capital with analyst Andrew Wong saying that it is "hard to ignore the improving undercurrents in both phosphate and potash markets." 3. Ultragenyx (RARE) upgraded to Overweight from Equal Weight at Barclays with analyst Gena Wang saying she thinks a higher price target for Crysvita could drive upside to revenue growth expectations. 4. U.S. Bancorp (USB) upgraded to Buy from Neutral at Citi with analyst Keith Horowitz saying now is an opportune time to build positions in the stock after three years of significant underperformance. 5. AMC Networks (AMCX) upgraded to Buy from Hold at Gabelli with the firm saying it remains an excelling company with opportunities to leverage its recent programming momentum into increased advertising and affiliate fees. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

05/11/18

JPMS

05/11/18UPGRADETarget $58JPMSOverweight

After meeting with CEO, JPMorgan upgrades Verizon to Overweight

JPMorgan analyst Philip Cusick upgraded Verizon Communications to Overweight from Neutral with an unchanged price target of $58. The shares closed yesterday up 81c to $47.20. After meeting with CEO Lowell McAdam, Cusick says he has a better understanding that Verizon's "organic approach to wireless has the company on an increasingly stable footing." Further, the analyst believes Verizon's 5G opportunity "will start to crystallize in the next few months." Cusick expects the company's revenue to stabilize and notes the stock is down 11% this year. The analyst is positive on the 5% dividend yield and "free 5G optionality."